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Put Geithner in a box and mark it "fragilly"

[Krugman has more. Ouch!]

Analyzing Geithner's interview on NPR, Interfluidity makes some very good points on the financial system:

[W]e've come to take it for granted that policymakers ought to be circumspect for fear of provoking traumatic moves in the markets. But isn't that dumb? Markets are supposed to be about aggregating and revealing information. In what sense is it "more responsible" to hide information or ideas so that markets do not move on them? And if markets do misbehave so wildly that public officials can no longer afford to be candid because of market consequences, does that suggest an incompatibility between the kind of financial markets we have and open democracy?

Taking for granted the constraints of the interview, what struck me most was Geithner's repeated conflation of our "financial system" and our "institutions". Mr. Geither's unspoken assumption is the fixing our financial system implies ensuring that incumbent troubled financial institutions are "strong". But that's not right. Our financial system is composed, in part, of financial institutions, but it is supposed to be larger and more robust than any specific firm. ... Three years ago, no one would have suggested that the strength of our financial system and the strength of Citibank are inseparable.

We should not let this verbal slip go unchecked. The idea that certain large, politically connected private firms are essential to commonweal and must be supported at all costs by the state is quite the essence of "Mussolini-style Corporatism".

"Lemon socialism" has costs beyond the direct cost to taxpayers of socializing losses. It prevents assets from being shifted from inefficient to efficient firms, and penalizes healthy, well-managed companies by forcing them to compete against subsidized competitors. I don't see how preventing healthy good banks from harvesting the organs of our megabanks "strengthens our financial system". ...

I think it's time to move beyond the nationalization/preprivatization debate and start talking about how to replace rather than reorganize failing firms. ... [I]t's time to move beyond nationalization and talk about state-managed liquidation. I look forward to an America with a strong financial system. I think that's more likely in a world where Citi's logo goes all retro chic like Pan Am. Frankly, I think that's all the (non-negative) "franchise value" that's left in Citi, and several of its peers.

Exactly. Why can't Timmy Geithner put a bullet in Citi?

Come on, banksters! Do you want to live forever?

NOTE Another Freudian slip! From the NPR announcer, "calm and collective." Oh, like Socialism? The interview is very, very interesting. The camera, as it were, dollies back, and the announcer desribes how Geithner's aides keep him on message. A must listen.

NOTE If anybody listens to Geithner's tone, I can't imagine they'll come away with any confidence in him at all. Starting, stopping, talking too fast, or too slow, laughing and smiling at inappropriate points, stuttering.... And surrounded by aides shoving talking points in his face.

NOTE Look it up, Jamison!

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Submitted by Randall Kohn on

Hopefully, a kitty litter box.

JFK has been shot, we miss him a lot
He always knew what to do

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